Valley National acquiring Florida bank

By RICHARD NEWMAN

STAFF WRITER |

Wire Service

* $312M deal is Wayne firm's first acquisition outside Northeast

Valley National Bank of Wayne said Thursday that it is buying 1st United Bancorp Inc., Florida's seventh-largest publicly held bank, in a deal valued at $312 million, marking Valley's first acquisition outside the Northeast.

Boca Raton-based 1st United and its wholly owned subsidiary, 1st United Bank, with about $1.7 billion in assets, has a 21-branch network including locations throughout southeast Florida, the Treasure Coast, central Florida and central Gulf Coast regions, Valley said in a statement.

Valley said its decision to enter the Florida market was because of its sizable residential mortgage and automobile lending platforms, and past real estate and consumer lending experience in the Florida markets.

"Valley has always employed a highly focused geographic growth strategy based on creating long-term shareholder value. However, we ultimately welcomed this tremendous opportunity to expand into one of the premier growth markets of the United States," said Gerald H. Lipkin, Valley chief executive officer, chairman and president.

The boards of both companies unanimously approved the transaction, which is expected to close early in the fourth quarter of 2014, subject to approvals from regulators and shareholders, Valley said.

Valley will pay 1st United shareholders 0.89 shares of Valley stock for each of their 1st United shares. The purchase price, the equivalent of $8.68 per share, represents a 19 percent premium to 1st United's closing price on Wednesday of $7.31.

Shares of Valley National Bancorp fell 28 cents, or 2.9 percent, to close at $9.48 Thursday in New York Stock Exchange trading.

The deal was driven in part by Valley's frustration with the slow-moving recovery of New Jersey's economy.

"Shareholders are demanding higher returns," Lipkin said Thursday in a phone interview. "The only way I can get them higher returns is increased volume."

Loan growth in New Jersey picked up at some banks in the first quarter, but business expansions and construction remain tepid by historical standards. In addition, there has been a decline in mortgage banking revenue from home refinancings this year, amid an increase in interest rates.

Lipkin, who has made many bank acquisitions over the years, went far outside the region this time to find a more promising opportunity, one where the economic recovery is stronger, where there is a better business environment and a faster-growing population (Florida is now the fourth-most populous state in the United States), and where the competition, perhaps, is not as fierce.

"We went to every state from New Jersey on down and didn't come up with an answer until we hit Florida," he said.

"We favor the deal," industry analyst Rick Weiss of Boenning and Scattergood Inc. wrote Thursday in a note to investors. "Valley's entry into faster-growing Florida markets provides a significant opportunity to deliver shareholder value over time. … The chief risk, excluding integration concerns, is the 'boom and bust' nature of Florida's economy," wrote Weiss, who reiterated his "neutral'' rating on Valley's stock.

The merged companies will have $18.1 billion in assets, $12.9 billion in loans, $12.7 billion in deposits, and 225 branches scattered through northern and central New Jersey, Manhattan, Brooklyn, Queens, Long Island and southeast and central Florida.

"Valley's substantial resources, similar culture, additional commercial and consumer product lines, and shared growth aspirations, combined with our team of Florida bankers, will provide the valuable ingredients needed to expand the Florida franchise for Valley," 1st United CEO Rudy Schupp said in a statement.

Schupp will continue to lead the Florida operation, Lipkin said.

Lenders at 1st United will be able to approach customers who want bigger loans than the Florida bank can now offer.

"Most of their loans are under $5 million," Lipkin said. "We are comfortable making $15 million loans, so their lenders can look for larger credits."

"We are aggressively looking for loans in New Jersey, but New Jersey is not showing strong growth. A large percentage of our growth is taking place in New York."

Lipkin said Valley has some experience in making residential mortgages in Florida, mainly for New Jersey customers buying retirement homes or second homes. It also has underwritten thousands of automobile loans in Florida through a third-party relationship that ended about 15 years ago, said Lipkin, who has a vacation home in Jupiter, Fla., where 1st United has a branch.

Valley National acquiring Florida bank

Valley National Bank of Wayne said Thursday that it is buying 1st United Bancorp Inc., Florida's seventh-largest publicly held bank, in a deal valued at $312 million, marking Valley's first acquisition outside the Northeast.

Boca Raton-based 1st United and its wholly owned subsidiary, 1st United Bank, with about $1.7 billion in assets, has a 21-branch network including locations throughout southeast Florida, the Treasure Coast, central Florida and central Gulf Coast regions, Valley said in a statement.

Valley said its decision to enter the Florida market was because of its sizable residential mortgage and automobile lending platforms, and past real estate and consumer lending experience in the Florida markets.

"Valley has always employed a highly focused geographic growth strategy based on creating long-term shareholder value. However, we ultimately welcomed this tremendous opportunity to expand into one of the premier growth markets of the United States," said Gerald H. Lipkin, Valley chief executive officer, chairman and president.

The boards of both companies unanimously approved the transaction, which is expected to close early in the fourth quarter of 2014, subject to approvals from regulators and shareholders, Valley said.

Valley will pay 1st United shareholders 0.89 shares of Valley stock for each of their 1st United shares. The purchase price, the equivalent of $8.68 per share, represents a 19 percent premium to 1st United's closing price on Wednesday of $7.31.

Shares of Valley National Bancorp fell 28 cents, or 2.9 percent, to close at $9.48 Thursday in New York Stock Exchange trading.

The deal was driven in part by Valley's frustration with the slow-moving recovery of New Jersey's economy.

"Shareholders are demanding higher returns," Lipkin said Thursday in a phone interview. "The only way I can get them higher returns is increased volume."

Loan growth in New Jersey picked up at some banks in the first quarter, but business expansions and construction remain tepid by historical standards. In addition, there has been a decline in mortgage banking revenue from home refinancings this year, amid an increase in interest rates.

Lipkin, who has made many bank acquisitions over the years, went far outside the region this time to find a more promising opportunity, one where the economic recovery is stronger, where there is a better business environment and a faster-growing population (Florida is now the fourth-most populous state in the United States), and where the competition, perhaps, is not as fierce.

"We went to every state from New Jersey on down and didn't come up with an answer until we hit Florida," he said.

"We favor the deal," industry analyst Rick Weiss of Boenning and Scattergood Inc. wrote Thursday in a note to investors. "Valley's entry into faster-growing Florida markets provides a significant opportunity to deliver shareholder value over time. … The chief risk, excluding integration concerns, is the 'boom and bust' nature of Florida's economy," wrote Weiss, who reiterated his "neutral'' rating on Valley's stock.

The merged companies will have $18.1 billion in assets, $12.9 billion in loans, $12.7 billion in deposits, and 225 branches scattered through northern and central New Jersey, Manhattan, Brooklyn, Queens, Long Island and southeast and central Florida.

"Valley's substantial resources, similar culture, additional commercial and consumer product lines, and shared growth aspirations, combined with our team of Florida bankers, will provide the valuable ingredients needed to expand the Florida franchise for Valley," 1st United CEO Rudy Schupp said in a statement.

Schupp will continue to lead the Florida operation, Lipkin said.

Lenders at 1st United will be able to approach customers who want bigger loans than the Florida bank can now offer.

"Most of their loans are under $5 million," Lipkin said. "We are comfortable making $15 million loans, so their lenders can look for larger credits."

"We are aggressively looking for loans in New Jersey, but New Jersey is not showing strong growth. A large percentage of our growth is taking place in New York."

Lipkin said Valley has some experience in making residential mortgages in Florida, mainly for New Jersey customers buying retirement homes or second homes. It also has underwritten thousands of automobile loans in Florida through a third-party relationship that ended about 15 years ago, said Lipkin, who has a vacation home in Jupiter, Fla., where 1st United has a branch.